1. Field of the Invention
The embodiments of the present invention relate to systems and methods for trading financial instruments and, in particular, to systems and methods for communication between customers and dealers involving customer requests for a market in a selected financial instrument.
2. Description of the Related Arts
Typically, trades are negotiated over the telephone. In such instances, a customer will call a dealer to price a particular financial instrument. In the case of some participants, such as larger hedge funds, the participant is resistant to revealing whether it is a buyer or a seller of the financial instruments (e.g., derivatives) in question. Thus, a convention has arisen in which the participant asks the dealer to “make a market” in the subject financial instrument. When a request to make a market is received, a responding dealer will typically respond with bid and ask prices representing the prices at which the dealer is willing to sell or buy the subject financial instrument. If the bid or ask price is at a level that suits the customer, the customer will verbally indicate that it will buy or sell the financial instrument at the bid or ask price, as appropriate. This verbal indication is an oral agreement to execute a trade of the subject financial instrument.
After the verbal trade, there are several confirmation and settlement steps that need to be carried out in order to finalized the trade. As a result, it is desirous to computerize some or all of the trading process, as disclosed by U.S. Pat. App. Serial No. 2004/0236668, the entire disclosure of which is incorporated herein by reference. However, in some instances, there may be technical problems in computerizing the trading process in the context of market making in the aforementioned fashion, including but not limited to a problem that is encountered when the dealer is given flexibility to customize the market being made.
Specifically, during a phone trade, a dealer always has the option to change a bid-ask price based on market conditions until the customer indicates acceptance. In order to provide a dealer with the same flexibility on an electronic trading platform, a technical problem may arise if the customer does not notice the change on the message window displaying the bid-ask price to the customer. Thus, in order to prevent a customer from unwittingly accepting an electronic trade in which the dealer has changed the bid and ask price in a manner adverse to the customer, there is a need to provide a technical solution to aid the customer and minimize customer mistakes, as well as to solve other technical problems.